Florida Offers New Tax Relief Package by Karen A. Lake, CPA

Posted on October 16, 2014 by Karen Lake

In May, Florida Gov. Rick Scott signed a bill cutting more than $120 million in taxes and ultimately reducing the tax burden of the state’s taxpayers. House Bill 5601 includes a combination of several tax holidays, credits and exemptions intended to save taxpayers more than $500 million in 2014.


Tax Credits

To help attract and keep businesses in the state, HB 5601 provides tax incentives to that allow businesses to take tax credits against corporate income taxes or insurance premium taxes or as a refund on collected sales tax. It also increases tax credits available to businesses that provide capital investments in rural and low-income communities through the New Markets Development program. Additionally, the bill extends by one year the Community Contribution Tax Credit to businesses that make qualified donations to non-profit organizations that provide affordable housing and promote economic development.


Tax Exemptions

HB 5601 exempts from state sales tax a range of products and services, including prepaid meal plans purchased by students currently enrolled in a state college, child restraint systems and booster seats, youth helmets and certain therapeutic veterinary diets. In addition, businesses in the construction sector will benefit from a temporary sales tax exemption on the purchase of mixer drums used to produce tangible personal property intended for future sale.


Other Tax Cuts

Finally, HB 5601 reduces the taxes for electricity, and clarifies and updates the definition of prepaid calling arrangements and their related taxes. Under the new definition, the sale or recharge of certain prepaid calling services will be treated as a sale of tangible personal property and therefore subject to retail sales and use tax, which is approximately half the amount of the communication services tax.

About the Author: Karen A. Lake, CPA, is associate director of Tax Services with Berkowitz Pollack Brant. She can be reached at the Miami CPA firm’s office at (305) 379-7000 or via email